Process Layout

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Process Layout
Chapter 8
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How Process Layout fits the Operations
Management Philosophy
Operations As a Competitive Weapon Operations
Strategy Project Management
Process Strategy Process Analysis Process
Performance and Quality Constraint
Management Process Layout Lean Systems
Supply Chain Strategy Location Inventory
Management Forecasting Sales and Operations
Planning Resource Planning Scheduling
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Layout Planning

• Layout planning is planning that involves
  decisions about the physical arrangement of
  economic activity centers needed by a facilitys
  various processes.
• Layout plans translate the broader decisions
  about the competitive priorities, process
  strategy, quality, and capacity of its processes
  into actual physical arrangements.
• Economic activity center Anything that consumes
  space -- a person or a group of people, a
  customer reception area, a teller window, a
  machine, a workstation, a department, an aisle,
  or a storage room.

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Layout Planning Questions

• Before a manager can make decisions regarding
  physical arrangement, four questions must be
  addressed.
• What centers should the layout include?
• How much space and capacity does each center
  need?
• How should each centers space be configured?
• Where should each center be located?

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Location Dimensions

• The location of a center has two dimensions
• Relative location The placement of a center
  relative to other centers.
• Absolute location The particular space that the
  center occupies within the facility.

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Absolute Locations vs. Relative Locations
Four of the absolute locations have changed but
not the relative locations.
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Strategic Issues

• Layout choices can help communicate an
  organizations product plans and competitive
  priorities.
• Altering a layout can affect an organization and
  how well it meets its competitive priorities in
  the following ways
• Increasing customer satisfaction and sales at a
  retail store.
• Facilitating the flow of materials and
  information.
• Increasing the efficient utilization of labor and
  equipment.
• Reducing hazards to workers.
• Improving employee morale.
• Improving communication.

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Performance Criteria

• Customer satisfaction
• Level of capital investment
• Requirements for materials handling
• Ease of stockpicking
• Work environment and atmosphere
• Ease of equipment maintenance
• Employee and internal customer attitudes
• Amount of flexibility needed
• Customer convenience and levels of sales

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Types of Layouts

• Flexible-flow layout A layout that organizes
  resources (employees) and equipment by function
  rather than by service or product.
• Line-flow layout A layout in which workstations
  or departments are arranged in a linear path.
• Hybrid layout An arrangement in which some
  portions of the facility have a flexible-flow and
  others have a line-flow layout.
• Fixed-position layout An arrangement in which
  service or manufacturing site is fixed in place
  employees along with their equipment, come to the
  site to do their work.

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A Flexible Flow Layout
A job shop has a flexible-flow layout.
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Designing Flexible-Flow Layouts

• Step 1 Gather information
• Space requirements by center
• Available space
• Closeness factors which centers need to be
  located close to one another.
• Closeness matrix A table that gives a measure of
  the relative importance of each pair of centers
  being located close together.
• Step 2 Develop a Block plan A plan that
  allocates space and indicates placement of each
  department.
• Step 3 Design a detailed layout.

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Gather Information
Example 8.1 Office of Budget Management
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Closeness Matrix
Example 8.1 Office of Budget Management
Departments 1 and 6 have the most interaction.
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Proposed Block Plan
4
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Applying the Weighted- Distance Method

• Weighted-distance method A mathematical model
  used to evaluate flexible-flow layouts based on
  proximity factors.
• Euclidean distance is the straight-line distance,
  or shortest possible path, between two points.
• Rectilinear distance The distance between two
  points with a series of 90 degree turns, as along
  city blocks.

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Distance Measures
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Calculating the WD Score
Example 8.2 Load Distance
Analysis
Current Plan Proposed
Plan Dept Closeness Distance Distance Pair F
actor, w d wd Score d wd
Score 1,2 3 1 3 2 6 1,3 6 1 6 3 18 1,4 5 3 15
1 5 1,5 6 2 12 2 12 1,6 10 2 20 1 10 2,3 8 2 16
1 8 2,4 1 2 2 1 1 2,5 1 1 1 2 2 3,4 3 2 6 2 6
3,5 9 3 27 1 9 4,5 2 1 2 1 2 5,6 1 2 2 3 3
ld 112 ld
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Line Flow Layout
A production line has a line-flow layout.
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Designing Line-Flow Layouts

• Line balancing is the assignment of work to
  stations in a line so as to achieve the desired
  output rate with the smallest number of
  workstations.
• Work elements are the smallest units of work that
  can be performed independently.
• Immediate predecessors are work elements that
  must be done before the next element can begin.
• Precedence diagram allows one to visualize
  immediate predecessors better work elements are
  denoted by circles, with the time required to
  perform the work shown below each circle.

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Line Balancing Example 8.3
Green Grass, Inc., a manufacturer of lawn
garden equipment, is designing an assembly line
to produce a new fertilizer spreader, the Big
Broadcaster. Using the following information,
construct a precedence diagram for the Big
Broadcaster.
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Line Balancing Green Grass, Inc.
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Desired Output and Cycle Time

• Desired output rate, r must be matched to the
  staffing or production plan.

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Theoretical Minimum

• Theoretical minimum (TM ) is a benchmark or goal
  for the smallest number of stations possible,
  where total time required to assemble each unit
  (the sum of all work-element standard times) is
  divided by the cycle time. It must be rounded up

Idle time is the total unproductive time for all
stations in the assembly of each unit. Efficiency
() is the ratio of productive time to total
time. Balance Delay is the amount by which
efficiency falls short of 100.
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Output Rate and Cycle TimeExample 8.4

• Green Grass, Inc.
• Desired output rate, r 2400/week
• Plant operates 40 hours/week
• r 2400/40 60 units/hour

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Calculations for Example 8.4 continued

• Theoretical minimum (TM ) - sum of all
  work-element standard times divided by the cycle
  time.
• TM 244 seconds/60 seconds 4.067
• It must be rounded up to 5 stations

Cycle time c 1/60 1 minute/unit 60
seconds/unit Efficiency () - ratio of
productive time to total time. Efficiency
244/5(60)100 81.3 Balance Delay - amount by
which efficiency falls short of 100. (100
- 81.3) 18.7
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Line Balancing
Big Broadcaster
c 60 seconds/unit TM 5 stations Efficiency
81.3
S1
S3
S2
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Green Grass, Inc. Line Balancing Solution
The goal is to cluster the work elements into 5
workstations so that the number of work-stations
is minimized, and the cycle time of 60 seconds is
not violated. Here we use the trial-and-error
method to find a solution, although commercial
software packages are also available.
c 60 seconds/unit TM 5 stations Efficiency
81.3
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Other Considerations

• In addition to balancing a line, managers must
  also consider four other options
• 1. Pacing The movement of product from one
  station to the next as soon as the cycle time has
  elapsed.
• 2. Behavioral factors of workers.
• 3. Number of models produced A mixed-model line
  produces several items belonging to the same
  family.
• 4. Cycle times depend on the desired output
  rate, and efficiency varies considerably with the
  cycle time selected.

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Creating Hybrid Layouts

• Layout flexibility is the property of a facility
  to remain desirable after significant changes
  occur or to be easily and inexpensively adopted
  in response to changes.
• A One-worker, multiple-machines (OWMM) cell is a
  one-person cell in which a worker operates
  several different machines simultaneously to
  achieve a line flow.
• A Cell is two or more dissimilar workstations
  located close together through which a limited
  number of parts or models are processed with line
  flows.

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Group Technology (GT)

• Group Technology (GT) is an option for achieving
  line-flow layouts with low-volume processes this
  technique creates cells not limited to just one
  worker and has a unique way of selecting work to
  be done by the cell.
• The GT method groups parts or products with
  similar characteristics into families and sets
  aside groups of machines for their production.

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Before Group Technology
Jumbled flows in a job shop without GT cells
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Applied Group Technology
Line flows in a job shop with three GT cells
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Warehouse LayoutsOut-and-back Pattern

• The most basic warehouse layout is the
  out-and-back pattern. The numbers indicate
  storage areas for same or similar items.

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Warehouse LayoutsZone System
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Office Layouts

• Most formal procedures for designing office
  layouts try to maximize the proximity of workers
  whose jobs require frequent interaction.
• Privacy is another key factor in office design.
• Four common office layouts
• Traditional layouts
• Office landscaping (cubicles/movable partitions)
• Activity settings
• Electronic cottages (Telecommuting)

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Lean Systems
Chapter 9
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How Lean Systems fits the Operations Management
Philosophy
Operations As a Competitive Weapon Operations
Strategy Project Management
Process Strategy Process Analysis Process
Performance and Quality Constraint
Management Process Layout Lean Systems
Supply Chain Strategy Location Inventory
Management Forecasting Sales and Operations
Planning Resource Planning Scheduling
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Toyota Production System (TPS)

• Toyota Production System (TPS) is one of the most
  admired lean manufacturing systems in existence.
• They have a process of continuous improvement.
• Work is completely specified as to content,
  sequence, timing, and outcome.
• Services and goods do not flow to the next
  available person or machine, but to a specific
  person or machine.
• Employees are stimulated to experiment to find
  better ways to do their jobs.
• Improvements to the system must be made in
  accordance with the scientific method, under the
  guidance of a teacher, at the lowest possible
  organizational level.

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Lean Systems

• Lean systems are operations systems that maximize
  the value added by each of a companys activities
  by paring unnecessary resources and delays from
  them.
• Just-in-time (JIT) philosophy The belief that
  waste can be eliminated by cutting unnecessary
  capacity or inventory and removing
  non-value-added activities in operations.
• JIT system A system that organizes the
  resources, information flows, and decision rules
  that enable a firm to realize the benefits of JIT
  principles.

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Characteristics of Lean Systems

• Pull method of work flow
• Quality at the source
• Small lot sizes
• Uniform workstation loads
• Standardized components work methods
• Close supplier ties
• Flexible workforce
• Line flows
• Automation
• Five S
• Preventive maintenance

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Push and Pull Systems of Work Flow

• Push method A method in which production of the
  item begins in advance of customer needs.
• Example A buffet where food is prepared in
  advance.
• Pull Method A method in which customer demand
  activates production of the service or item.
• Example A restaurant where food is only prepared
  when orders are placed.
• Lean systems use the pull method of work flow.

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Characteristics of Lean Systems

• Pull method of materials flow
• Quality at the source
• Small lot sizes
• Uniform workstation loads
• Standardized components work methods
• Close supplier ties
• Flexible workforce
• Line flows
• Automation
• Five S
• Preventive maintenance

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Quality at the Source

• Quality at the source is an organization-wide
  effort to improve the quality of a firms
  products by having employees act as their own
  quality inspectors, and never pass defective
  units to next stage.
• One approach for implementing quality at the
  source is to use poka-yoke, mistake-proofing
  methods aimed at designing fail safe systems that
  minimize human error.
• Another approach for implementing quality at the
  source is a practice the Japanese call jidoka,
  and andon, which gives machines and machine
  operators the ability to detect when an abnormal
  condition has occurred.

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Characteristics of Lean Systems

• Pull method of materials flow
• Quality at the source
• Small lot sizes
• Uniform workstation loads
• Standardized components work methods
• Close supplier ties
• Flexible workforce
• Line flows
• Automation
• Five S
• Preventive maintenance

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Small Lot Sizes

• Lot A quantity of items that are processed
  together.
• Setup The group of activities needed to change
  or readjust a process between successive lots of
  items.
• Single-digit setup The goal of having a setup
  time of less than 10 minutes.

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Characteristics of Lean Systems

• Pull method of materials flow
• Quality at the source
• Small lot sizes
• Uniform workstation loads
• Standardized components work methods
• Close supplier ties
• Flexible workforce
• Line flows
• Automation
• Five S
• Preventive maintenance

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Uniform Workstation Loads

• A lean system works best if the daily load on
  individual workstations is relatively uniform.
• Service processes can achieve uniform workstation
  loads by using reservation systems (e.g.,
  scheduled surgeries) and differential pricing to
  manage the demand.
• For manufacturing processes, uniform loads can be
  achieved by assembling the same type and number
  of units each day, thus creating a uniform daily
  demand at all workstations.
• Mixed-model assembly produces a mix of models in
  smaller lots.

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Characteristics of Lean Systems

• Pull method of materials flow
• Quality at the source
• Small lot sizes
• Uniform workstation loads
• Standardized components work methods
• Close supplier ties
• Flexible workforce
• Line flows
• Automation
• Five S
• Preventive maintenance

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Line Flows and Automation

• Line Flows Managers of hybrid-office and
  back-office service processes can organize their
  employees and equipment to provide uniform work
  flows through the process and, thereby, eliminate
  wasted employee time.
• Another tactic used to reduce or eliminate setups
  is the one-worker, multiple-machines (OWMM)
  approach, which essentially is a one-person line.
• Automation plays a big role in lean systems and
  is a key to low-cost operations.

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Characteristics of Lean Systems

• Pull method of materials flow
• Quality at the source
• Small lot sizes
• Uniform workstation loads
• Standardized components work methods
• Close supplier ties
• Flexible workforce
• Line flows
• Automation
• Five S
• Preventive maintenance

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Five S (5S)

• Five S (5S) A methodology consisting of five
  workplace practices conducive to visual controls
  and lean production.

• Sort Separate needed from unneeded items
  (including tools, parts, materials, and
  paperwork), and discard the unneeded.
• Straighten Neatly arrange what is left, with a
  place for everything and everything in its place.
  Organize the work area so that it is easy to find
  what is needed.
• Shine Clean and wash the work area and make it
  shine.
• Standardize Establish schedules and methods of
  performing the cleaning and sorting. Formalize
  the cleanliness that results from regularly doing
  the first three S practices so that perpetual
  cleanliness and a state of readiness is
  maintained.
• Sustain Create discipline to perform the first
  four S practices, whereby everyone understands,
  obeys, and practices the rules when in the plant.
  Implement mechanisms to sustain the gains by
  involving people and recognizing them via a
  performance measurement system.

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Continuous Improvement with Lean Systems
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The Single-Card Kanban System

• Kanban means card or visible record in
  Japanese refers to cards used to control the
  flow of production through a factory.
• General Operating Rules
• Each container must have a card.
• The assembly line always withdraws materials from
  fabrication (pull system).
• Containers of parts must never be removed from a
  storage area without a kanban being posted on the
  receiving post.
• The containers should always contain the same
  number of good parts. The use of nonstandard
  containers or irregularly filled containers
  disrupts the production flow of the assembly
  line.
• Only nondefective parts should be passed along.
• Total production should not exceed the total
  amount authorized on the kanbans in the system.

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Determining the Number of Containers
Example 9.1 Westerville Auto Parts Company
produces rocker-arm assemblies for use in the
steering and suspension systems of
four-wheel-drive trucks. A typical container of
parts spends 0.02 day in processing and 0.08 day
in materials handling and waiting during its
manufacturing cycle. Daily demand for the part
is 2,000 units. Management believes that demand
for the rocker-arm assembly is uncertain enough
to warrant a safety stock equivalent of 10
percent of inventory.
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Calculations for Example 9.1
Westerville Auto Parts
a. If each container contains 22 parts, how
many containers should be authorized?
k 10 containers
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Calculations for Example 9.1
Westerville Auto Parts
b. A proposal to revise the plant layout would
cut materials handling and waiting time per
container to 0.06 day. How many containers would
be needed?
Proposed change from 0.08
k 8 containers
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Value Stream Mapping

• Value stream mapping (VSM) is a qualitative lean
  tool for eliminating waste (or muda) that
  involves a current state drawing, a future state
  drawing, and an implementation plan.

Current state drawing
Future state drawing

• Value stream mapping (VSM) spans the entire
  value chain, from the firms receipt of raw
  materials to the delivery of finished goods to
  the customer.

Work plan implementation
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Selected Set of Value Stream Mapping Icons
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A Representative Current State Map for a Family
of Retainers at a Bearings Manufacturing Company
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Organizational Considerations

• The human costs Lean system implementation
  requires a high degree of regimentation, and
  sometimes it can stress the workforce.
• Cooperation Trust Workers and first-line
  supervisors must take on responsibilities
  formerly assigned to middle managers and support
  staff.
• Reward systems and labor classifications must
  often be revamped when a lean system is
  implemented.
• Existing layouts may need to be changed.

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Process ConsiderationsInventory Scheduling

• Schedule Stability Daily production schedules in
  high-volume, make-to-stock environments must be
  stable for extended periods.
• Setups If the inventory advantages of a lean
  system are to be realized, small lot sizes must
  be used.
• Purchasing and Logistics If frequent, small
  shipments of purchased items cannot be arranged
  with suppliers, large inventory savings for these
  items cannot be realized.